[Svartalfiar]

Here's the fine print:

Here’s how it would work: After the first $1 million in taxable income, the government would impose a 6 percent surcharge on every dollar earned, until it made up for the tax benefits that the rich receive from the low tax rate on that first $45,000. That surcharge remains until the government has clawed back the full $12,420 [the new standard deduction], which would occur at about $1.2 million in taxable income.

They're basically reducing/eliminating the standard deduction on taxpayers who earn more than $1 million.

The impact of this change is likely to be negligible. I suspect most people in this income range are smart enough to figure out how to avoid paying even the 39.6% tax, let along the "effective" 45%.

Well this is quite the misleading headline/article. At that magic $1.2M number, you simply don't get the standard deduction. Your overall tax bill is still less than 39%, as all the income in the earlier brackets is taxed lower. Of course, it doesn't seem like the article is consistent - it implies the extra tax is to make up for the lower tax rate on their first income, but then says it's filling in for the standard deduction.

Question though. If this passes, does it also change the name of the standard deduction to the 'poor person deduction'?

[Alberta's Child]

I’ll also point out that my post may not be completely correct. I’m trying to interpret what seems (to me) to be a very confusing description of this “hidden bracket.” LOL.